Alternative supply specifications and estimates of regional supply and demand for stumpage.

Abstract

Four plausible sets of stumpage supply and demand equations were developed and estimated; the demand equation was the same for each set, although the supply equation differed. The supply specifications varied from the model of regional excess demand in which National Forest harvest levels were assumed fixed to a more realistic model in which the harvest on the National Forests depended on current Federal timber sales, uncut-volume-under-contract, and stumpage price. Each set of equations was estimated with annual time-series data for Montana to test the effect of changing supply specification on stumpage demand. Each of the four sets of equations was estimated with two different proxies for the price of stumpage to test the effect of changing the definition of private stumpage price on demand. The slope of the demand curve--the coefficient measuring the change in stumpage price per unit change in quantity demanded~vaded, sometimes dramatically, by supply specification and by the proxy used to measure stumpage price.

Citation

Connaughton, Kent P.; Jackson, David H.; Majerus, Gerard A. 1988. Alternative supply specifications and estimates of regional supply and demand for stumpage. Res. Pap. PNW-RP-399. Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest Research Station. 19 p